Correlation Between Conagra Brands and Postal Svgs

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Can any of the company-specific risk be diversified away by investing in both Conagra Brands and Postal Svgs at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Conagra Brands and Postal Svgs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Conagra Brands and Postal Svgs Bk, you can compare the effects of market volatilities on Conagra Brands and Postal Svgs and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Conagra Brands with a short position of Postal Svgs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Conagra Brands and Postal Svgs.

Diversification Opportunities for Conagra Brands and Postal Svgs

0.09
  Correlation Coefficient

Significant diversification

The 1 month correlation between Conagra and Postal is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Conagra Brands and Postal Svgs Bk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Postal Svgs Bk and Conagra Brands is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Conagra Brands are associated (or correlated) with Postal Svgs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Postal Svgs Bk has no effect on the direction of Conagra Brands i.e., Conagra Brands and Postal Svgs go up and down completely randomly.

Pair Corralation between Conagra Brands and Postal Svgs

Considering the 90-day investment horizon Conagra Brands is expected to generate 4.5 times less return on investment than Postal Svgs. But when comparing it to its historical volatility, Conagra Brands is 2.96 times less risky than Postal Svgs. It trades about 0.02 of its potential returns per unit of risk. Postal Svgs Bk is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  1,098  in Postal Svgs Bk on May 13, 2022 and sell it today you would earn a total of  103.00  from holding Postal Svgs Bk or generate 9.38% return on investment over 90 days.
Time Period1 Month [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Conagra Brands  vs.  Postal Svgs Bk

 Performance (%) 
       Timeline  
Conagra Brands 
Conagra Performance
0 of 100
Over the last 90 days Conagra Brands has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Conagra Brands is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Conagra Price Channel

Postal Svgs Bk 
Postal Performance
0 of 100
Over the last 90 days Postal Svgs Bk has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in September 2022. The current disturbance may also be a sign of long term up-swing for the company investors.

Postal Price Channel

Conagra Brands and Postal Svgs Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Conagra Brands and Postal Svgs

The main advantage of trading using opposite Conagra Brands and Postal Svgs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Conagra Brands position performs unexpectedly, Postal Svgs can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Postal Svgs will offset losses from the drop in Postal Svgs' long position.

Conagra Brands

Pair trading matchups for Conagra Brands

The idea behind Conagra Brands and Postal Svgs Bk pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

Postal Svgs Bk

Pair trading matchups for Postal Svgs

Check out your portfolio center. Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try Focused Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.

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